Buy Experiences.. not things!
The Science Of Why You Should Spend Your Money On Experiences like sailing on San Francisco Bay, Not More Things!
If you want to be happy and don’t have infinite money, this information is for you! It is all about why you should spend the money you have on stuff that research says makes you happy.
The Science Of Why You Should Spend Your Money On Experiences, Not Things…
Most people I know are in the pursuit of happiness, fulfillment and joy. There are economists who think happiness is the best indicator of the health of a society. We tend to agree. We know that money can make you happier, though after your basic needs are met, it doesn’t make you that much happier. But one of the biggest questions is how to allocate our money, which is (for most of us) a limited resource.
There’s a very logical assumption that most people make when spending their money: that because a physical object will last longer, it will make us happier for a longer time than a one-off experience like a concert or vacation or a day out on the water. According to recent research, it turns out that assumption is completely wrong.
“One of the enemies of happiness is adaptation,” says Dr. Thomas Gilovich, a psychology professor at Cornell University who has been studying the question of money and happiness for over two decades. “We buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.”
So rather than buying the latest iPhone or a new Tesla, Gilovich suggests you’ll get more happiness spending money on experiences like going to art exhibits, doing outdoor activities, learning a new skill, or traveling. In our ever humble option, being out on the water is the best! It brings a sense of calm and awe that few other things can provide.
Gilovich’s findings are the synthesis of psychological studies conducted by him and others into the Easterlin paradox, which found that money buys happiness, but only up to a point. How adaptation affects happiness, for instance, was measured in a study that asked people to self-report their happiness with major material and experiential purchases. Initially, their happiness with those purchases was ranked about the same. But over time, people’s satisfaction with the things they bought went down, whereas their satisfaction with experiences they spent money on went up.
If you think about it, this makes sense… everything you own owns a piece of you whether it is time, attention or money every thing takes maintenance. Also, time is the only thing you can’t buy more of. So, the lesson is to use it wisely!
It’s counterintuitive that something like a physical object that you can keep for a long time doesn’t keep you as happy as long as a once-and-done experience does. Ironically, the fact that a material thing is ever present works against it, making it easier to adapt to. It fades into the background and becomes part of the new normal. But while the happiness from material purchases diminishes over time, experiences become an ingrained part of our identity. Travel and experiences make you grow and in the end last longer!
“Our experiences are a bigger part of ourselves than our material goods,” says Gilovich. “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.”
One study conducted by Gilovich even showed that if people have an experience they say negatively impacted their happiness, once they have the chance to talk about it, their assessment of that experience goes up. Gilovich attributes this to the fact that something that might have been stressful or scary in the past can become a funny story to tell at a party or be looked back on as an invaluable character-building experience. Who couldn’t use more character!?!
Another reason is that shared experiences connect us more to other people than shared consumption. You’re much more likely to feel connected to someone you took a vacation with in San Frnacisco than someone who also happens to have bought a 3 carrot diamond.
“We consume experiences directly with other people,” says Gilovich. “And after they’re gone, they’re part of the stories that we tell to one another.” These stories are the places we go in our mind when we are quiet. These are the times we miss and remember when we are old.
And even if someone wasn’t with you when you had a particular experience, you’re much more likely to bond over both having sailed around Alcatraz or seeing the same sites than you are over both owning a MacBook Pro.
You’re also much less prone to negatively compare your own experiences to someone else’s than you would with material purchases. One study conducted by researchers Ryan Howell and Graham Hill found that it’s easier to feature-compare material goods (how many carats is your ring? how fast is your laptop’s CPU?) than experiences. And since it’s easier to compare, people do so. Only you know the true magic you felt when the sea lion surfaces next to the boat or you see a harbor porpoise while on the bay. It is a rush of joy like no other!
“The tendency of keeping up with the Joneses tends to be more pronounced for material goods than for experiential purchases,” says Gilovich. “It certainly bothers us if we’re on a vacation and see people staying in a better hotel or flying first class. But it doesn’t produce as much envy as when we’re outgunned on material goods.”
Gilovich’s research has implications for individuals who want to maximize their happiness return on their financial investments, for employers who want to have a happier workforce, and policy-makers who want to have a happy citizenry.
“By shifting the investments that societies make and the policies they pursue, they can steer large populations to the kinds of experiential pursuits that promote greater happiness,” write Gilovich and his coauthor, Amit Kumar, in their recent article in the academic journal Experimental Social Psychology.
If society takes their research to heart, it should mean not only a shift in how individuals spend their discretionary income, but also place an emphasis on employers giving paid vacation and governments taking care of recreational spaces.
“As a society, shouldn’t we be making experiences easier for people to have?” asks Gilovich.
Why do people travel? See Full Article here
BY JAMIE BIESIADA
DECEMBER 12, 2022
For most leisure travelers, the end goal of a vacation probably isn’t to fly on a plane, sleep in a hotel or drive a rented car. It’s to do something — even if that “something” is relaxing on a boat — away from home. It could be something local, like a museum visit, or something driven by a hobby or passion, like taking a cooking class with a local or getting out of the San Francisco Bay for a sail.
In other words, this is what the industry calls “experiences.”
“Experiences are the core reason for travel,” Phocuswright research manager Coney Dongre said during the Tours, Attractions and Activities sector panel at this year’s Phocuswright Conference.
The tours, activities and attractions sector — more broadly known as the experiences industry — is a fragmented space populated largely by small businesses. Arival, a company that tracks the sector, estimates there are a million operators globally.
“It’s not like a conventional, uniform product segment the way other sectors of travel are,” said Arival co-founder and CEO Douglas Quinby. “We all know what an airline is. We all know what a hotel is. We know there’s a difference between a JW Marriott and a Residence Inn and a Red Roof Inn.”
‘Experiences is not a conventional, uniform product segment like other sectors of travel are.’
Douglas Quinby
But within the activities and attractions sector, there are around 140 to 150 distinct industry types, such as walking tours, boat tours, bus tours, amusement parks and beyond, plus any number of hybrids and combinations.
It’s also the third-largest sector of travel and tourism, with prepandemic gross bookings peaking at $254 billion globally, only surpassed by flights and accommodations, according to Quinby.
Like other sectors, experiences took a heavy hit from the pandemic, Phocuswright found in its “Outlook for Travel Experiences 2019-2025,” published in October and prepared by Arival. But gross revenue is expected to surpass 2019 levels by 2024, when global gross bookings are projected to reach $260 billion. We are Bay Lights Charters can confirm this is true
As anyone who has tried to research or book an experience online in the past few years knows, the Internet is awash with options. Some are great, some not so. How do you know? How can you tell?
A Google search this month for “Vatican tours,” for example, returned more than 76 million results. The first page alone contains links to 13 different websites among more common names like Tripadvisor, Viator and GetYourGuide.
“The experiences industry within travel has blossomed in the past decade or so in great part because these companies can now make themselves visible online, and that visibility extends both to travel advisors as well as travelers,” said industry analyst Henry Harteveldt, founder of Atmosphere Research Group.
Nontraditional types of experience providers, like people offering cooking classes out of their home, can list their services on sites like Airbnb Experiences, he said. Knowledgeable locals can list their personal tours on Viator. You will find Bay Lights Charters on both and many more.
“The Internet has democratized access to activities and experiences, but it has also introduced a level of complexity and concern,” Harteveldt said.
‘The Internet has democratized access to experiences, but it has also introduced complexity.’
Henry Harteveldt
But even while a number of operators have gravitated to either having an online presence or offering online-bookable products, there are even more operators who are lagging behind. Those operators still rely on bookings by phone or email.
Quinby said experiences trail the rest of the travel industry as a whole when it comes to “digitization, connectivity, accessibility for booking.”
New booking systems brought online in recent years are helping more operators digitize, according to Quinby, and the sector has experienced some “profound shifts” in the past five to 10 years. However, an Arival study found that 56% of day tour operators don’t use a booking system. That number stands at 31% and 23%, respectively, for activity operators and visitor attractions.
Unsurprisingly, those who don’t use a booking system tend to be smaller companies. But more will likely look to digitize. We are seeing this for ourselves. We recently signed on with a booking system, Peek.
“Adoption has grown dramatically over the past decade,” Quinby said. “Operators, especially the forward-looking ones, have seen that the future is digital.” But we think people still crave that personal touch, that human experience. Our Schooner is 100% manual and gives our guests that one on one human experience.
For travel advisors, the sector is an important one: While it may represent a fraction of a commission check compared with accommodations, experiences are typically the most memorable part of a client’s vacation. Most opt to book through a preferred supplier or a destination management company (DMC), partners they know and trust to serve their clients.
The level of complexity in the space “is really where travel advisors come in and, as they always do, make sure their clients are going to be in the best possible hands when it comes to booking an activity,” Harteveldt said.
As the sector has grown, it’s become more difficult to find out which operators are legitimate, he said. He recommended an advisor, or someone on their team, do thorough homework before working with a new experience provider. But, in many cases, organizations they are already affiliated with, like a host agency or consortia, have already done that work, he added.
However they vet operators, though, Harteveldt pointed out the importance of offering clients a full slate of services, even if it’s not the biggest slice of a commission check.
“It may not necessarily be about the money,” Harteveldt said. “Even if you are selling an activity that is several hundred dollars, if you’re getting a 10% commission, it will barely pay probably for a few reams of paper or something. That’s not the pathway to becoming a billion-dollar corporation. But it does improve the utility of the advisor to his or her clients, and it elevates the advisor’s knowledge and credibility with the client.”
Karryn Christopher, Signature Travel Network’s executive vice president of marketing and preferred partnerships, called tours and activities “a fragmented and complicated landscape.” Despite that, most Signature members do sell experiences to clients. They largely work through Signature’s preferred partners.
“Not only is selling activities and experiences lucrative, those special moments create the differentiated experience travelers want,” Christopher said.
Signature works with a number of preferred partners that offer tours and activities, like Bedsonline, Traveling Spoon, Walk and its 88 Signature Destination Specialists, most of whom offer excursions and activities. Many offer online booking options, she said.
One of those preferred partners, a newer partner for Signature, is Project Expedition. Its co-founder, Rob Keen, said his company competes with the likes of Viator from a business-model perspective, but it focuses on the B2B segment. Project Expedition works with local tour companies and offers 22,000 products from nearly 2,000 local companies. More are added on a weekly basis.
“If you’re a travel agent, trying to build that network yourself is hard,” Keen said.
Project Expedition focuses on customer service and getting to know the advisors it works with. The company is a preferred partner with Signature, Internova and MAST Travel Network.
Christopher said Project Expedition was “a great example of a company that continues to refine their technology and services to meet the needs of travel advisors and their clients.”
More than half of Signature’s member agencies are booking with it, she said.
Keen said he expects more operators to digitize, which means more choice for advisors.
“Remember, when people get home, they’re going to talk about that day tour, that daytrip, that experience that they had,” Keen said. “That’s part of your overall trip, and the overall trip is what you as an advisor put together. You want them coming home and talking about that one thing.”
Kathryn Mazza-Burney, chief sales officer of Travelsavers, said most of the advisors who are affiliated with an American Marketing Group company use preferred partners and DMCs to book experiences not only because they know the product well but because it offers a higher commission.
Online players that are more consumer-focused, like Viator, but also offer agents commission are usually viewed as “a last resort” for advisors, she said, “because they are pretty complicated to navigate around.”
However, larger sites like Viator do offer commission (starting at 8%, in Viator’s case) and options, and agents are tapping into those resources.
Viator houses more than 300,000 bookable experiences, and lately it has been a shining star in Tripadvisor’s portfolio of brands. In the third quarter, its revenue grew 138%, and it is pacing ahead of prepandemic revenue. As of the end of the third quarter, revenue was 179% of 2019 levels for the same period of time, and gross bookings were 92% higher than 2019 levels.
Sarah Dines, Viator’s chief commercial officer, said the company’s Travel Agent Program is “experiencing significant growth,” with more agents turning to Viator to book experiences for travelers.
‘Travelers are craving unique, high-quality experiences they will remember the rest of their lives.’
Sarah Dines Viator’s Chief Commercial Officer
“Souvenirs are not enough,” Dines said. “They’re craving unique, high-quality experiences they will remember for the rest of their lives.”
Experiences are also an attractive market for online travel agencies.
OTAs themselves “have had a major impact on how travelers discover and book experiences and on general marketing and distribution trends,” Arival’s Phocuswright report on activities states.
In October, Priceline launched Priceline Experiences with more than 80,000 activities available on Priceline
.com. It was the OTA’s first significant foray into experiences.
Denise Bialek, Priceline’s senior director of ancillary products, said the move was driven by consumer demand and the need to book experiences in advance. Priceline Experiences is powered by ticketing platform Musement.
Kasia Jawien, Expedia Group’s senior director of activities, focuses on overseeing the company’s commercial partnerships with activities providers.
“Activities have been a part of Expedia offerings now for over 20 years,” Jawien said. “And the simple reason for that is that it’s the reason why people travel, to explore new cultures, learn new cultures and really get those human connections.”
Originally, Jawien said, Expedia focused more on direct relationships with activities providers, but it shifted toward working more with third-party providers to offer more than 220,000 experiences sold on most of its brands.
That mirrors a larger industry trend, according to Phocuswright’s “U.S. Online Travel Agency Market Report 2021-2025,” which found that while sourcing supply directly was an initial OTA strategy, most have moved toward working with partners like Musement, Viator and GetYourGuide.
‘There’s certainly more to be done to move this industry to be a more digital industry.’
Kasia Jawien
With much of the activities sector still offline, Jawien said, opportunity abounds.
“We acknowledge that there’s certainly more to be done to move this industry to be a more digital industry,” she said. “That opportunity is there.”